Editorial: To improve economy, reform liquor laws

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The Dedham Transcript

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Posted Jun. 15, 2014 at 8:00 AM

Posted Jun. 15, 2014 at 8:00 AM

DEDHAM

» Social News

It’s easy to talk in general terms about reducing government regulation to spur economic growth. Gov. Deval Patrick has a specific proposal, and it’s one the Legislature should embrace. Since the end of Prohibition, the number of liquor licenses available in Massachusetts cities and towns has been set by a rigid formula based partly on population. That works fine for some communities, but in many more, the number is lower than the demand. If a new business is opening and all those licenses are taken, the municipality must petition the Legislature to grant additional licenses. The Legislature functions on its own schedule, guided by internal and external forces, and it can take six months or more before it acts on the municipality’s request. Meanwhile the new business is stuck in a waiting game, which serves no purpose – except perhaps to stall new competition for an existing business.

Any artificially created shortage pushes up prices, which is what has happened with liquor licenses. If the limit has been reached, a new business must buy a license from someone else, which can cost plenty – as much as $450,000 in Boston, according to one report. That money goes to the license holder, not to the city or town. And that’s where the resistance to reforms has come from. Massachusetts Restaurant Association President Bob Luz said that while the commonwealth’s restaurants generally support increasing license availability and streamlining the regulatory process, lifting the existing regulations could mean a loss for existing owners "who may have paid a far steeper price due to current market restrictions." That’s a narrow interest standing in the way of a far broader public interest in letting markets, not special privileges, determine the number of bars, restaurants and liquor stores a community can support. Patrick wants to move the decisions on how many licenses should be available back to the local level, with city and towns empowered to lift the cap at will. We’d go even further, eliminating the caps altogether, but the governor’s proposal, part of a larger economic development plan, is a start. Sen. Jamie Eldridge, D-Acton, has a similar bill before the Senate. Unfortunately, Patrick’s reform was left out of the House economic development bill, an omission we’d like to see corrected by amendment. Liquor license regulations – and there are many of them – may be a small part of the Massachusetts regulatory regime so many complain about, but they are easy to understand and hard to justify. Someone who wants to open a restaurant shouldn’t have to wait months or years for permission from the Legislature, or pay an exorbitant fee to an existing license-holder. Those who think deregulation is a key to economic growth should start with the state’s archaic liquor laws.